News analysis

Europe's other crisis

Greener than thou

WHILE Europe's leaders battle for the euro, another signature creation of the European Union (EU), one of the world's most ambitious climate change policies, is also under attack. That is largely to its credit. Unlike most governments, the Europeans are actually trying to cut emissions of greenhouse gases and, in a globalised economy, this is starting to test trade rules and inconvenience others.

There are two main battlefields. The first, on land, concerns a proposed European effort to discourage more-than-usually polluting sources of transport fuel, known as the Fuel Quality Directive. It would do so by categorising sources of transport fuel according to their carbon intensity (a measure of the emissions involved in producing them) and penalising the most polluting. This has enraged Canada, whose production of oil from tar sands, a sludgy naturally-occurring bitumen which it has in abundance (for instance north of Fort McMurray, Alberta, pictured), would be a notable victim. Ahead of the first major EU vote on the proposed scheme, by a congregation of European officials on February 23rd, Canada threatened that, if it were passed, it would lodge a complaint with the World Trade Organisation.

The officials ducked the issue, with 89 voting for, 128 against, and 128 abstaining, including those from Britain, France and Germany. It will now be decided at a meeting of European ministers, probably in March. With Britain and France against the regulation—the former allegedly out of solidarity with an old ally, the latter apparently because Total, a French oil company, is heavily invested in tars sands—the lobbying, for and against, will be fierce.

The second conflict is in the air, and concerns a European law to bring airlines into the EU's cap-and-trade project, the Emissions Trading Scheme (ETS). This is a bigger fight; the law is also a done deal. As of January 1st local and foreign airlines must have ETS permits to cover the emissions from all their flights into and out of the EU. To soften the blow, they will initially have 85% of these for free. They will have to buy the remaining 15% at the end of the first accounting period, in April 2013.

A group of 26 countries, including Russia, America, India and China, are incensed, arguing that the law infringes their sovereignty. This is principally because it applies to the entirety of the targeted flights, including the portion outside EU airspace. In response the EU argues that this is consistent with aviation norms and would otherwise be hard to administer. On February 21st and 22nd representatives of most dissenters met in Moscow to plot possible retaliatory measures. Some have warned of the row escalating into a possible trade war. Even before the meeting, China had forbidden its airlines to comply with the scheme.

Despite a lot of strident rhetoric during the meeting, that remains the most concrete challenge to the EU law. The dissenters issued a declaration in Moscow which listed eight possible retaliatory steps, including imposing new taxes on European carriers and denying them new flying rights. Russia is also reported to be mulling passing a similar ban to the Chinese. But this was less than some of the dissenters had promised. And with America rumoured to be making its peace with the EU scheme, there is a chance the opposition may be cooling. If it does not, the parties will have until early next year, when the airlines are due to be billed, to work out a compromise.

Timely fillip or grand humiliation

It would be better still if the UN's International Civil Aviation Organisation (ICAO) would institute a global scheme, to make airlines pay for their emissions, of its own. The EU's action on airlines was spurred by its longstanding failure, despite many promises, to do so. Now, embarrassed by the EU's forthrightness, ICAO is again promising to come up with something. If it does, the EU says it will happily absolve airlines of their duties under the ETS.

This is high-stakes stuff, not least because of the precedents the EU threatens to set. Canada does not sell much tar-sands oil to Europe; yet it is terrified of having it stigmatised as a dirty fuel. (For the same reason, tar sands lobbyists prefer to call it “oil sands”.) The airlines, previously free to pollute, are also most concerned by the precedent that losing their impunity has established. They face a more immediate cost, too; though it is probably not as big as they say. A group of American airlines, who lost a legal challenge to their inclusion in the ETS in the European Court of Justice last December, claimed it would cost them $3 billion by 2020.

That sounds like an exaggeration. Nor was it an argument for their exclusion. Unchecked, fast-rising aviation emissions—currently around 3% of the global total—will cause vast environmental damage for which someone, somewhere, will have to pay. The idea of the ETS is to avoid that prospect, by steering polluters to embrace clean technologies—as aviation biofuels, for example, may turn out to be.

For the EU, the stakes are also high: this is a delicate time for its climate policy. Its steersmen appear to have taken heart from the lead role they played in salvaging a slightly-better-than-expected deal from the UN's climate summit in Durban last December (almost nothing having been expected). At the same time, a tanking carbon price has cast a pall over the ETS. Due to a combination of economic recession and overly-generous allocation of permits, it has been at less than €10 a tonne all year. That is less than half its record high and too low to paint investment strategies green. In an effort to correct this, on February 28th a committee of the European Parliament approved a proposal to constrict the supply of ETS permits associated with yet another new green rule, concerning energy efficiency. The parliament is now set to vote on the proposal.

Pushing through the fuel rule and holding the airlines to account would give both steersmen and market another fillip. On the other hand, being forced to cave in on the aviation issue, in particular, would be a grand humiliation, which the EU's climate folk will fight hard to resist. Hence the enthusiasm Connie Hedegaard, the EU's feisty Danish climate tsar, is showing for the scrap. In a message on Twitter, she asked: “Unfortunately, our question for Moscow meeting participants remains unanswered: what's your concrete, constructive alternative?”

The scenarios the article highlights are very good examples how in a closed, integral system we exist in today no individual, nation or even a whole continent can make decisions without taking into consideration the whole system.
Through the global crisis we increasingly see examples of this trap, where what is beneficial for one nation is very negative for another, as in this global, interconnected network we overlap with each other on multiple levels and while our attitude is subjective, selfish we are causing damage to the rest of the system by default.
This is one of the reasons there is no current solution for the Eurozone crisis, or for the trade and currency arguments between the US and China for example, as each of them is making only self-calculation without taking the other into consideration.
But in today's interdependent system it is not enough to take into consideration only neighbors, or direct trade partners, instead we have to take into consideration the whole system, basically before any planning or action we have to examine what effect our plan or action has on the total network and only go ahead if the overall effect is positive, basically making most of the planning and action in a mutually responsible manner.
We need to do it not on moral or ethical grounds, or because we want to "look beautiful and righteous".
This kind of attitude is simply a necessity since the laws governing integral systems dictate that any individual, or nation can only prosper, succeed, have a sustainable future if the whole system is robust, and performs optimally. Thus from now on for any plan or action we need to look at the state and benefit of the whole network first and only after consider our own individual calculations.

From January 1, around 4,000 airlines that fly to and from EU airports were included in the bloc's Emissions Trading Scheme ETS and must next year surrender carbon credits against their 2012 emissions. It's worth a look at exactly what's happening within international airline alliances right now to see how airline groups are already dealing with EU ETS compliance issues in the real world.
Air France, itself a subsidiary of Air France-KLM, bought its first carbon units directly via Paris-based emissions exchange BlueNext during late January 2012. I understand Air France has started its procurement strategy by buying both EU Allowances (EUAs) and Certified Emissions Reductions (CERs) to cover its own flights, but not those of partner KLM.
Air France is quoted as expecting its' fleet emissions to be 16-17 million tonnes in 2012, meaning it would need to buy around 4 million permits on top of its free allocation of 12.6 million EUAAs, the aviation CO2 units distributed under the ETS.
Together, Air France-KLM will in total emit 30 million tonnes versus its free quota of around 23 million EUAAs. The group is a key menber of the Sky Team alliance, including Delta (who have aleady added a $3 per sector ETS ticket surcharge), Alitalia and China Southern Airlines.
I understand the group's airlines are collaborating by sharing ETS procurement and compliance strategies, and would also look to offer excess CO2 permits internally before selling them on the open market if an excess develops.
This is the reality of ETS implementation, despite last-ditch political posturing: Sky Team's airlines, which include 2 members, Delta and China Southern, from the US and China, countries whose administrations are currently particularly vocal in expressing anti-EU ETS sentiments and threats, ARE complying fully with ETS regulations; are using common, collabarative monitoring, verification and trading platforms; and are already charging passengers a few €s per flight sector.
This looks to me like a competent, law-abiding and timely response from Sky Team airlines. Cue applause. Others to follow this lead please. Cue more applause!
Jeff Gazzard
Aviation Environment Federation
LONDON

First I am not sure I agree with what you say about evolution. Usually survival of the fittest works in between species, or between the actual species and the changing environment. And all along the species try to remain in homeostasis with the system they exist in, if you examine any living creature, plant or animal they are instinctively in harmony with their environment.
Only humans exploit their own kind purposefully and exploit their environment beyond their necessities and means.
Our Ego disconnected us from natural evolution, we have been on a different path from the rest of nature.
But the thing is we are still part of the vast system of nature, as much as we try to think we are above it.
And this vast system around us put us into different conditions in the 21st century. While before we existed in a "loose" system still allowing us to expand and exploit, today we are locked into a closed, interconnected system where this previous behavior has become self destructive.
Thus now we are in the "survival of the fittest" paradigm you mentioned: do we understand that we have to change in order to survive in the new conditions or not? On paper humans are the only creature that can change their own inherent nature consciously by free will. Are we going to exercise this capability or we choose to remain as we are and face an unpredictable future?

Look I truly do not want to convince you about anything.
You can easily ask a zoologist or watch films on Animal planet to learn that a lion will not eat or kill when it is not hungry or has to feed its cubs. No animal consumes more in a natural environment than its necessity. The lion is actually doing a great service by eating and killing when it is hungry, keeping the very fine balance of the different species in that environment. When those predator animals are depleted by humans we can see how this balance is broken thus certain species are multiplying causing damage somewhere else and so on.
The 'circle of life' idea is not only for Hollywood cartoons, it is reality.
Now your poor elephants in Botswana were not part of a natural habitat but already in a distorted habitat corrupted by humans, as I understand they were bred excessively for the tourists.
Where humans are respectfully not present the fine balance is observed and we can examine it in professionally restored national parks easily.
All I try to say is that contrary to other animals the "human animal" apart from being an egoist, has something that is called free choice. It means a human is capable of independently observing its environment, its own behavior and than make calculations about its future.
So far we haven't been doing such calculations we randomly and instinctively obeyed our inherent selfish desires as any other animal, except that we have been exploiting everything we could way beyond our necessities.
But now as we approach a breaking point in human evolution, as we can easily destroy ourselves or our environment or both even within this generation (highlighted in multiple objective scientific studies) we have the choice and capability to change our behavior against our instincts and return to balance and homeostasis like other animals, except that we do it consciously, willingly changing ourselves.
Judged by your response you might not be interested in this, but there could be people who would like to expand humanity's lifespan a bit longer, and we have the chance of doing so with the vast talent humanity amassed and our capability to adapt. The problem is not our talent and capability but the direction we have been using it so far.
I understand that you feel pain when someone mentions "we" in the context of humanity since up until now we lived as "I" without any thought of "we". You are not alone with this all of us feel the same.
Thus here is our free choice what is more important, preserving the "I" risking extinction, or we grudgingly accept the "we" in order to carry on with this human experiment.

We are not able to see the true natural world of mankind . What we are watching is a result of propaganda and misinterpretation. I quote "And what are the values that the mass media communicate on behalf of our culture? Power heads the list: power over others, power over nature. As Hannah Arendt points out,' in today’s media world it is not so much that power corrupts as that the aura of power, its glamorous trappings, attracts' Close to power are the values of wealth and property, the idea that everything can be purchased and that consumption is an intrinsic good. The values of narcissism, immediate gratification of wants, and creature comforts follow close behind.
Thus the mass media tell us that we are basically good, that happiness is the chief end of life, and that happiness consists in obtaining material goods. The media transform the value of sexuality into sex appeal, the value of self-respect into pride, the value of will-to-live into will-to-power. They exacerbate acquisitiveness into greed; they deal with insecurity by generating more insecurity, and anxiety by generating more anxiety. They change the value of recreation into competition and the value of rest into escape. And perhaps worst of all, the media constrict our experience and substitute media world for real world so that we are becoming less and less able to make the fine value judgments that a complex world requires.
In terms of the economic system, the media are the obedient servant of capitalism. The high technology required for our current mass-communication system, with its centralized control, its high profits, its capital-intensive nature, and its ability to reach every individual in the society, is perfectly suited for a massive production-consumption system that is equally centralized, profitable and capital-intensive. Our production-consumption system simply could not exist without a communication system that trains people to be knowledgeable, efficient and hard-working producers and consumers. The fact that capitalism turns everything into a commodity is admirably suited to the propaganda system of the mass media, which turns each member of the audience into a consumer."
This article appeared in the Christian Century, January 19, 1977, p. 32 by William F Forehttp://www.religion-online.org/showarticle.asp?title=1131

You see that is the point.
When there is war or some terrible natural catastrophe we are capable of pulling together, working for each other even, sacrificing ourselves for others.
But the wise man does things before the trouble begins.

Could Newsbook or some other blogger do a more detailed piece on the EU Emissions Trading Scheme? The E10 price per tonne of carbon dioxide is being called a failure caused by EU oversupply. But if the low price is actually because companies can reduce their emissions much more cheaply than they claimed when they lobbied against the legislation, it's really a success. I'd be interested to see someone from the Economist do the analysis on how effective the ETS has actually been in reducing emissions.

I fail to see why France should go out of its way to coddle Total, which thanks to creative accounting (transferring profits there and losses here, Creativity 101) does not pay a red cent of taxes to its Treasury.

But then again, this does not mean it is not doing exactly that... the current French leadership is eager to throw even more money to its owners before it is kicked out.

I hope EU will continue in green policies. Relating to emissions cutting, the only sector that grows to produce emissions is transport. I see only chance to change it by increase the tolls for road freight transport and introducing tolls for personal automobile transport in whole EU. Simply, it is needed to tax all road transport externals, that are now paid by anyone else, but not motorists. This could reduce road transport and start renaissance of railways.